Business Context and Reporting Period
Company: Atricure, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 21, 2005
Event Date: November 21, 2005 (Agreement effective October 1, 2005)
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics. It discloses a new contractual financial obligation:
- Minimum Quarterly Royalty Payment: $50,000
- Aggregate Maximum Royalty Obligation: $2,000,000
- Royalty Rates: 1.5% to 15% of revenues from the Wolf Dissector and related inventions
Material Changes
The company entered into a Material Definitive Agreement (Royalty Agreement) with Randall K. Wolf, M.D., co-inventor of the Wolf Dissector. This creates a direct financial obligation not previously disclosed in this specific filing context.
Outlook, Risks, and Contingencies
- Agreement Term: Effective October 1, 2005, terminating December 31, 2009.
- Termination Rights: Both parties retain the right to terminate the agreement immediately for cause.
- Contingency: Future cash outflows are contingent on sales revenues of the Wolf Dissector, subject to the minimum quarterly guarantee.
Investor Verification Checklist
- Verify the impact of the $50,000 quarterly minimum payment on future cash flow projections.
- Review the full Royalty Agreement text (to be filed in the next Form 10-K) for specific definitions of "revenues" and "cause" for termination.
- Assess the sales volume of the Wolf Dissector required to reach the $2,000,000 aggregate cap.